Here in Shenzhen, I would argue that it's fairly clear to anyone on the ground that the boom has ended.
There are currently a host of half-finished huge buildings that are not being completed. For instance, I can see a bunch from my window. This is most likely due to lapsed demand and reduced speculative investment in the sector.
This is really just a delayed adjustment along the lines of an established national change, Shenzhen possibly encountered the slowdown later owing to increased expectations/hype/financing availability and special economic and political darling status.
I would say from physical observation that the second half of last year was the real slow down, things haven't changed much since then.
The local real estate market is pretty expensive... a lot of people who bought apartments 10 years ago are now USD multi-millionaires, despite having real incomes as low as 1-2000USD/month. As a consequence of consistent price growth, purchasing a small apartment now costs about the same as Sydney, with a median price above USD$1M. It is fairly difficult to rent a halfway decent apartment under about 6000CNY (~1000USD)/month, many pay double that or more.
Similar situation here in some parts of India. There are dollar millionaires on paper with family incomes of under $1500/month, all because they bought an apartment in Delhi 10 years ago.
The problem is, there are no buyers. The apartments are priced at $1M on paper, but there are no buyers.
I wonder what will happen once the bubble collapses.
A good brand new apartment in a decent part of Gurgaon, India, will set you back by at least $800+/month
> The apartments are priced at $1M on paper, but there are no buyers.
This happened in Italy during the first couple of years of the big crisis, around 2008. People here were so attached to the idea that house prices can't go down in Italy, that sellers just waited longer and longer to sell at their expected price... then, all of a sudden, we had something like a 30% correction when people, banks etc. couldn't wait any more.
China is a bit different: the real estate agencies that will show your apartment won't bother listing and showing it if it's under a certain price. They basically work together to drive up prices, which also leads to higher commissions of course, but there is also some government control as the agencies are all owned by princelings. You can't really hope to sell without an agent, so you can't drop your price even if you wanted to.
India is exactly the same. Collusion between developers and politicians is creating an illusion that everything is all right and prices are going to go up again so a minority with surplus money left is still buying.
I have two personal example. Despite my reasonable arguments my family invested close to 1 crore (10 million) Indian rupees in property for a meager 3% per annum returns in rental income. I feel the pinch because a significant part of it is my hard earned money. Sometimes you just can't help it.
Then there is a friend who is buying another flat because he has accumulated some money by living outside India. He thinks he will sell it at a higher price in couple of years.
Any evidence based arguments about history of real estates failures are simply ignored. Everybody thinks this India is different.
Reason just fails when competition between neighbours takes over to hoard more and more.
There is collusion between banking, real estate developers, agents and politicians in the western world too ...
I actually I think we invented this stuff.
PS: 3% return p.a. for a real estate investment? Amazing; around here real estate investments return zero or below and investors count on property price appreciation, tax deductables or maybe rent increase.
In Indian context, it's below inflation. Cost of management and maintenance is also need to be added so effective it will be between 1 and 2 percent. Not great for developing country where inflation swings anywhere between 5 to 9 percent.
Depositing same money in bank will give more than twice the return.
Some will be able to cash out obviously. The problem is that if a significant but small percentage tried to cash out, the market would collapse pretty quickly. Ugh, you have to have balls of steel to play in these kinds of market, and timing needs to be good as well.
> Any evidence based arguments about history of real estates failures are simply ignored. Everybody thinks this India is different.
This happened/happens so often, in so many places and markets. Just to mentions a few recent ones: dot-com "new economy", housing bubble in the noughties, cryptocoins right now... it's always, "this time is different".
I don't think they did it without his consent. The thing is, investing in a house is one of the first things your parents would ask you to do once you start earning; and considering the amount of influence your parents have on decisions like this in India, he would probably have had to go with their opinion.
>Bonds and stock market are considered as casinos.
Which is correct, except that with bonds and stocks you win on average, while in a casino you lose on average. This equivalence of risk=losing with no regard for expected return is pretty common in many countries. I wonder why that is? A history of scams?
Is it possible to borrow against your houses "worth" in China? I'm wondering if these high valuations allow residents to borrow larger amounts of money using their houses "value" as collatoral? If so is it common?
There's only so long that can last though. If nobody is buying at the high prices then the agents who refuse to list lower won't earn any commissions and they'll eventually decide to lower their threshold.
In a similar country to China, Let's say the last deal in a certain area was done for $1M 5 months ago. At this point all similar apartments in the area are considered or put on sales at this or a higher value. Then time elapses with no new deal but owners feel wealthy.
Cities will keep growing in India. Because the gap between facilities available within a city and outside a city is so stark. That gap has grown exponentially in the last twenty years.
If you want to run a business, find quality healthcare or education, resolve legal issues you head to the nearest city.
> Why would anyone value property higher than people are willing to pay? Wouldn't that just mean more property tax?
The idea between property tax seems to be different between countries. I learned that in some countries you pay annual property tax based on the estimated value of your property - which would be not-beneficial like you said.
Here in germany you pay an annual property tax which is calculated based on the land area that you own. E.g. you pay for 200m^2, and the amount of tax per m^2 is fixed by the city. That means you would pay the same independent of whether you value or property at 1€ oder 10M€. There's also a real estate transfer tax which the buyer of a property needs to pay. This is calculated based on the real price. However it doesn't affect the seller. So valuing your property higher than it's market value has no tax implications, but of course it will be a lot harder to really sell it for more than market rate.
Wouldn't this mean the guy with a condo block on his 200m^2 is being subsidized by the retiree with a single-family home on her 200m^2? More infrastructure, schools, wider streets needed for the condo.
Does Germany not fund its schools with property tax?
They are not correct. Property tax in Germany is based on some fictious value (which is not necessarily close to market value) calculated using an old algorithm. Usuable floor area is an an important input, so a condo block and a family home are not taxed equally.
There have been serious proposals for reform in the past few years but a tax based on land area alone was not seriously considered so far by the competent body as far as I know (but there have been calls for them to do so e.g. by some mayors).
Nonetheless, property tax ends up in the hands of municipalities, making up about 15% of their budget on average. Roads and schools are only partially funded through the municipality's budget, a huge chunk comes from higher levels. For schools, municipalities pay about one third of the cost (again, on average). This ensures e.g. that schools are adequately funded even in poor districts. It also has practical reasons. For example teachers are usually not employed by the school itself but civil servants of the state delegated to teach at the school. Thus their salary doesn't end up in the school's budget.
Distribution of tax income and expenses between the different levels of government is highly political and constantly bargained. For example, just this year was decided that the federal government gets more administrative rights regarding highways and digitalization ("data highways") for giving the states 4B€ more of the sales tax.
There's some multiplication factor in there which is higher for condos than for single-familiy homes. Which means in your example the first guy would pay slightly more. I don't know exactly how the taxes are used. I think property tax (Grundsteuer) is a tax which is payed to the city. But I'm not sure whether schools receive their fundings from the city, state, country or a mix of those.
"Property tax to GDP ratio in a country generally does not exceed 3 per cent. For developing countries, the average property tax to GDP ratio is around 0.7 per cent. Reliable information on the collection of revenues from property tax in India is not available, but property tax collection is estimated at about 0.2 per cent of GDP.
...
Delhi offers an example where the total number of properties is stated to be 25.3 lakh, but only 9.6 lakh properties are on the municipal tax register. Low collection rates are also a dominant feature of Delhi, reflecting administrative inefficiency."
Well its India, in some transactions, lets say the final price is 1 million, the buyer and seller will agree to show the price as 800,000 legally (so you pay the tax on that amount) while 200,000 is paid in cash.
That's the opposite of what puranjay said. Your scenario is claiming to have paid lower than the real payment (to save on taxes, which is logical). Puranjay said that people claim the value is more than the real value.
Fortunately there is still few decades of continuing albeit slowing urbanization and economic growth left for Chinese economy. Hundred million or more people are still going to move to cities. Even slowing down Chinese economy has massive infrastructure needs left. Empty space will be filled years later. Investors will suffer heavy losses but
the material investments will contribute to the economy.
Investment boom is the easiest problem to solve. Pollution is far worse problem and needs quick solutions. Pollution may be part of the reason why infrastructure doesn't sell. Shenzhen has the best air quality of the largest cities, but it still feels bad and above WHO safe limits.
If apartments are so expensive shouldn't that drive more construction? I wonder why construction has slowed/stopped if the existing stock is renting at such high levels.
You'd be surprised how much commercial real estate turned residential in Beijing illegally (e.g. Soho jianwai near guomao). I'm guessing there is a lot of residential supply, it just isn't on the market.
>"It is fairly difficult to rent a halfway decent apartment under about 6000CNY (~1000USD)/month, many pay double that or m"
I'm guessing that $10K is supposed to be $1K US? Paying double that or more would put on par with places like NYC as well.
Is none of that new real estate for the rental market then? Usually when the demand dries up for purchase developers will put them on the market as rentals so they are at least generating income. I'm guessing this maybe just hasn't happened yet? Or maybe all those high rises are mostly commercial?
In my observation throughout key parts of the city the vast majority of new real estate visibly under construction is commercial, not residential. Only on the edges do you see new residential development. Therefore, I would hazard a guess that the supply in the most desirable areas has not increased, and perhaps actually decreased.
The Chinese are big, big believers in buying your own home. That can translate into lower rents for a given purchase price. (Or, equivalently but possibly easier to understand, higher prices for a given rent.)
Also, until recently, renting conferred no social benefits that buying did; the most important being placement in a local public school. Guangzhou is piloting giving renters more social benefits, other cities are supposed to follow, but this is super recent.
Such claim is highly misleading at best. Think about those millions of migrant workers in Shenzhen and their children, did they go to some kind of public schools in the last 3 decades? did they all go to private ones or stay uneducated? surely they went to public schools dedicated to them.
They now demand _better_ education and access to _better_ public schools, which is totally fine. However, the real problem here is how many of them are paying tax/social security contribution when compared to the rest of the population? e.g. how many people actually believe that those construction workers building skyscrapers in Shenzhen actually pay a fair amount of tax/social security contribution?
Guangzhou is piloting a new level of PC without addressing any real issue.
Wow, I don't think you are Chinese because you really don't know much about hukou, of which the rent issue isn't even getting near. First answer: mostly no. Second answer: most of them stayed home with grand parents (see China's left behind children problem). Third answer: there were cheap private schools dedicated to migrant worker kids, but the cities (like Beijing) shut them down saying they would try to take them in public schools, a promise that is never kept.
As a foreigner higher paid "migrant worker", we are not garaunteed access to public Chinese schools even if we pay taxes. We have to use private international schools for our kids instead. Public is just not an option. For my Chinese colleagues at work who lack hukou, ditto, though they can try to negotiate their way in to varying degrees of payment and success.
Guangzhou is doing a couple of things: those with skilled worker permits who are paying tax can get schooling for their kids even if they don't have hukou, a novel thing in china. And you can get priority access to a school in the local area just by renting an apartment.
Those construction workers do pay social tax contributions, and no, they aren't treated fairly at all because of their rural hukou. The GZ policy isn't even really aimed at people like them, it is rather aimed at people like us who make much more money. See:
(Using very recent Chinese sources). They specifically require a "highly skilled worker certificate in lieu of hukou". So as usual china doesn't care about poor migrant workers, they have to leave their kids behind.
My hukou is registered to the Jing'an district in Shanghai and I have been in the "system" for decades. ;)
You basically got misled by what you was told. To just name one simple example - rural hukou is better because every single one of those households was recently given land for FREE. CCP confirmed a few years back that the land given to those families back in the 70s/80s will permanently stay under the name of the current owning family without any further tax/levy. Next time when someone complains about the unfair rural hukou treatment, please don't forget to ask them how much land was given to them for free. Those living in the cities (e.g. me) never ever got that stuff. I'd happily trade my non-rural hukou for a rural one to get my fair share of those free rural land.
Be prepared when they explain to you about nonsense stuff like "oh, land is owned by the country, we were just given permanent right to use the land tax free".
> To just name one simple example - rural hukou is better because every single one of those households was recently given land for FREE.
I know that, and I also know that it gives kids access to substandard education in toufu schools along with requiring higher gaokao scores to get into urban universities, the only ones in China that don't suck. Many of these kids are left at home with their grandparents because their parents have gone off to the cities to work. They maybe see their parents once a year during Chinese New Years.
> Next time when someone complains about the unfair rural hukou treatment, please don't forget to ask them how much land was given to them for free.
Nor can they ever sell this land and move to the cities unless the government explicitly compensates them for confiscation. They can't even use the land as collateral for a bank loan to upgrade their farming infrastructure. They would basically be treated as serfs if they didn't become migrant workers in the cities.
> I'd happily trade my non-rural hukou for a rural one to get my fair share of those free rural land.
You have Shanghai hukou and you'd trade it in for rural hukou just for a few acres of land that you have to farm and can't sell? I'm not sure if you are being serious here, I'm tempted to post it on WeChat for laughs.
> Be prepared when they explain to you about nonsense stuff like "oh, land is owned by the country, we were just given permanent right to use the land tax free".
> along with requiring higher gaokao scores to get into urban universities
Students from the same province, rural or urban, subject to the same standard. the real gap is between different provinces, e.g. urban students from province X living a modem fancy city life can still be at disadvantage compared to students from the rural part of Beijing living their boring village life.
Note that the gap between different provinces have been there for hundreds of years[1].
> Nor can they ever sell this land and move to the cities unless the government explicitly compensates them for confiscation. They can't even use the land as collateral for a bank loan to upgrade their farming infrastructure. They would basically be treated as serfs if they didn't become migrant workers in the cities.
Serfs? You mean they were given the land for free and they are allowed/encouraged to rent out the land to generate an income, this is now the new definition of serfs? Maybe the government who gave them the land should issue an apology and compensation to all those received such free land?
As someone 'on the ground' as it is I wonder if you know what ever happened to Broad Group[1] and their Sky City project [2]. Was that just a PR stunt for the company or do you think they will ever actually build something like that.
That's a different part of China, but I can tell you that I know of at least one functional automated building solution under heavy R&D right here in Shenzhen with a reported R&D-only capex of over USD$1M/month.
That is good to know. I expect that one possible future has rising sea levels creating 'cities on demand' on higher ground as people wait to the last minute to adapt. With a capability inland of the level projected by Broad group it would be possible to create housing for over several million people per year.
That said, the capability to house millions of people in 'new' construction over a short period of time (less than a year) is a new capability that is only now becoming possible.
One of the things I try to avoid is assuming that problems that had either no solution or only bad solutions in the past, continue to have only bad solutions.
I wonder if there might be a global housing crisis in the future. I know the population is constantly growing, but there has been a massive amount of construction of residential buildings world-wide (due to prolonged period of low interest rates, as well as rapid appreciation of existing assets).
Population growth has been slowing since 1989 and the population in total is predicted to peak between the mid and late 21st century[1]. In many western countries this has already happened.
On the other hand, the number of persons per household still has quite a bit of room for dropping in many parts of the world. The USA seems to have plateaued there at about 2.5 (https://www.statista.com/statistics/183648/average-size-of-h...), but China still is at 3.0, and India at 4.8 (https://en.m.wikipedia.org/wiki/List_of_countries_by_number_...). If both drop to 2.5, that's 20% potential growth in China and over 90% for India. Whether that will happen and at what speed of course is anybody's guess.
"The United Nations Population Division projects world population to peak at over 10 billion at the end of the 21st century, but Sanjeev Sanyal has argued that global fertility will fall below the replacement rate in the 2020s and that world population will peak below 9 billion by 2050, followed by a long decline. A 2014 study in Science concludes that the global population will reach 11 billion by 2100, with a 70% chance of continued growth into the 22nd century."
So clearly there is disagreement between those two. Using the 2014 study, there would be an increase in the current population(~7 billion) by greater than 50% and continued growth for another centruy.
Strange that the boom ended and there's a glut in supply but the rental prices are so high. Seems to counter the prevailing narrative that "build! build! build!" housing supply increases will drive down rents.
China is currently caught in a trap between speculative demand, demand by speculators who hope real estate asset prices will keep increasing, and real demand of actual use for these assets. It is difficult to see what the real demand for these sky scrapers are, even if they have no problem selling them off to speculators. Who knows how this will end, hopefully real demand will catch up but I'm guessing there will be a Japan-scale real estate crash eventually.
I was fortunate to stay at the hotel at the top of Guangzhou's IFC (the first and probably last time I get a room that is above the 90th floor). Looking down on Guangzhou's skyline, at least, it was very beautiful (especially when a lightning storm rolled in).
My biggest issue with my local housing market is what you might consider a commercialisation of residential real estate. Property prices don't reflect their value as places to live and their location, but rather their ability to be a vehicle for investment income. High rent ensues and yet the lower demand for those properties as rentals doesn't deter the property prices from rising. Currently there are a handful of almost completely empty apartment buildings in the CBD.
People can't afford to rent or buy them yet they still move about the property market.
At some point they will surely come back into circulation at a price that makes sense for individuals, that is of course if they aren't all owned entirely by corporate scale landlords with bigger pockets.
Rents are pretty low in china relative to sale prices. In Beijing at least, you'll pay around $2k for something that costs a million to buy; I'm guessing Shenzhen is similar if not as bad. It isn't worth it for speculators to rent as renovations reduce value; apartments are bought unrenovated only, all previous owner renovations have to be torn out because no one likes or trusts other people's renovations. So a lot of empty apartments are waiting to be flipped, but, even though prices are sky high, sales volume can be very anemic.
> yet the lower demand for those properties as rentals doesn't deter the property prices from rising.
this is an interesting phenomenon, because it's the same mechanism (imho anway, as an armchair economist) as gold prices rising during uncertain times. The actual use of gold is little to none, and yet, as a store of value, everyone in the society agrees on its stability/valuation, even in times of gov't hostility.
If you look at property this way, chinese speculators are using the same line of thinking - where they actually don't want the apartment to be rented out (and thus, look/feel 'used'). The price reflects not the utility, but as a store of value.
I think the fundamental reason this is happening is that the chinese do not trust their own gov't enough to store their assets in a more liquid form. Or, perhaps there's really no other forms of storage that's not risky. And those who can't bring their currency assets out of the country then must choose real-estate.
> I think the fundamental reason this is happening is that the chinese do not trust their own gov't enough to store their assets in a more liquid form.
Not really, it is as simple as "It is more profitable and equally risk-free to buy house than letting money rot in the bank."
People are still rushing to buy whatever government bonds as soon as they are available, because they pay good interests and are less risky. People in China are driven by pragmatism more than loyalty or distrust in the government.
You can see the utility as a store of value in international investment properties too. A part of the problem driving prices up in my locale. Chinese and other international investors seeking to store wealth will purchase properties here, and they will pay prices that the local market wouldn't. That drives the prices up, as locals with property want a piece of that international cash. Meanwhile the property can go underutilized and the community it is in gains nothing.
> Meanwhile the property can go underutilized and the community it is in gains nothing.
but what doesn't make sense to me is why not build more property to sell?
The money the original owners got for selling must be circulating somewhere, which means a boost to the local economy, which means they should have money to invest in new development.
>I think the fundamental reason this is happening is that the chinese do not trust their own gov't enough to store their assets in a more liquid form. Or, perhaps there's really no other forms of storage that's not risky."
Leaving your money in a bank, the most liquid way to store it provides almost no appreciation on that asset. I think the Chinese put their money into real-estate for the same reason other people do - because it's seen as a good investment:
> I think the fundamental reason this is happening is that the chinese do not trust their own gov't enough to store their assets in a more liquid form.
nonsense. check the total amount saved in state owned banks. or check how many seconds it takes to sell government bonds.
I live in a complex in Shanghai where the rent for a 2bed 1study apartment without car parking is $3.5k USD. The yield is extremely low as that property would cost you $3m including taxes/fees to buy. Because the rent is so cheap compared to the cost to own, I saw people trying to rent but couldn't get any unit for months all the time. Low demand?
Just curious are you an expat there? If so what kind of work are you doing and what sort of compensation are you looking at (if you don't mind sharing)
China is caught in a position where speculative demand outpaced real demand by several years. It's failure in timing, not failure in estimating actual future demand.
Unlike Japan, China is still in the midst of urbanization and growth. The gradually slowing pace of growth and urbanization does not mean that the scale of infrastructure investments is outpacing the eventual need. Over 100 million people have still to find their place in cities. China will start to resemble Japan around 2040-2050.
Investors are hurt and timing misallocation is not a good thing, but China is not where Japan was in the 90's.
China has enough urban residential capacity to house the urban population three times over; that's almost the entire country. Looking for public link as was from private paper.
A former coworker from China said a lot of real estate (particularly civil construction) happens when a new mayor or other leader gets appointed. New construction is a great source of graft - I will order the new construction if you give me 10% (or whatever the rate is). So things get built over and over again, or built and abandoned.
it may look cool from far away, like a skyline shot, all lit up. However at micro level, streets in China (especially newly developed) are entirely indiscernible and total lack of character.
If you watch any of the driving in China videos on youtube, you'll see that streets are lined with shops and sidewalks that are sterile and look identical block after block...
There are exceptions of course, city squares, etc, are largely unique from one another.. but once you get into the urban residential and shopping districts, they mostly are all identical
They have a point. As an American, I found Switzerland to be a bit more diverse than Beijing, having lived in both.
The big problem is Chinese brick and mortar retail is so dysfunctional, and it will never be fixed since online shopping has easily solved that problem around it.
I wonder how this is any different in any other places?
For example in the USA, iconic places like LA, Miami and Chicago also are extremely boring and and look similar street by street. Especially LA. After hearing the hype for about 3 decades visitors will just realize it's extremely large ghetto connected with 8 lane highways.
Haven't been in Shenzhen myself but I used to live in Shanghai and visited Beijing and Suzhou often, all of which were really interesting places and didn't "lack character".
This was exactly my impression of LA when I visited for the first time last month. A city that peaked 50+ years ago (though, to be fair, that can be said about many American cities).
Well.. I am guessing that there is a high degree of similarity for newly developed urban residential and shopping districts across the globe. I certainly noticed that new strip malls and housing developments in Texas looked quite similar to the new strip malls and housing developments in California.
"Identical" seems a bit too strong of a word though, especially considering there are 160 Chinese cities with more than 1 million people, and 3.7 million square miles in the country. There must be some places where streets are not generally identical and totally lacking character.
For example, in Shanghai, you can find Art deco, Shikumen, Soviet style and modem buildings everywhere. You simply can not find such a similar mixture in other places. If that is not considered as "character", then you need to seriously consider what do you mean by "character".
I always thought the little shops on the street were interesting when I first moved to china, but it got monotonous later. Heck, shopping malls are much worse, there is very little diversity in Chinese brick and mortar retail. It was bad enough that I would just do most of my shopping on trips back to the states.
This is SO true. I live in Hong Kong and whenever I go to Shenzhen I feel like the city is a copy paste of a single street, for kilometers. It feels empty and awkward.
HK's favourite hobby is Shenzhen bashing. My retort would be: at least Shenzhen residents don't need government housing support!
Which areas have you been? There's actually a lot of variation across the city, but single districts tend to be fairly similar. For example, Luowu is old and crowded, and quite built up. Futian is car-oriented, with wide roads and a commercial focus in most areas, but also a cultural area. Huaqiangbei area has huge malls, tech, but also parks and gardens. Nanshan has a lot of tech companies and universities, but also some lovely green areas. Shekou is another old area but with a glitzy mall zone as well. Houhai is a huge mall area with a theater and open public space. Qianhai is an emerging financial district with lots of apartments and westerly water views. There are numerous mountains across the city, many of which have nice streets and parks nestled against them. Then there is the semi-industrial Bao'an district, a lot of waterfront parks, beaches out to the east, etc. It's pretty varied I'd say. Perhaps you just haven't seen enough of it?
Lived 3 years in Shenzhen, and 2 years in HK. Now I live in Shanghai. From my perspective, what the grandparent said about Shenzhen is very true. You just can't compare "green areas" in Shenzhen (Wutong mt? Meilin? What else?) to the enormous and amazing network of country trails like MacLehose Trail in Hong Kong. Is it also incredibly diverse, you can walk around posh Central, then hop on a ferry to Lamma or Cheung Chau and be on a beach in 20 minutes. Come back and walk 20 minutes up to SoHo/PoHo area, walk through Lan Kwai Fong and climb the Mid-level Escalators (amazing by itself) up, walk the Bowen road through the beautiful greenery and descend into hectic Causeway Bay area. Hong Kong is endless and people are actually interesting and open. Shenzhen is one giant construction site where people just work, gorge on food, and shop. Absolutely soulless.
"Absolutely soulless"? How do you define soul? The middle of HK is the world's densest collection of enormous banks, paper-shufflers and finance types, with some desertified malls and generic retail. Granted, for geographic reasons Shenzhen doesn't have HK's network of (historically established, precipitous, mountainous) national parks, but Shanghai has no nature at all. Last time I visited HK they had ripped out the art museum, the one decent cultural attraction.
Yes, I agree with you. Shanghai is very far from being my favorite place on Earth, but for other reasons I am here, and from pure architectural and cultural points of view, it is way above most Chinese cities. Hong Kong, on the other side, becoming more and more China-fied. That's partly a reason why I left. My friends who stayed there all agree it's getting worse with every year. Though there is still much to see and do there, and amount of open clubs for any kind of interests from MTB to cross-stitching is staggering.
There are currently a host of half-finished huge buildings that are not being completed. For instance, I can see a bunch from my window. This is most likely due to lapsed demand and reduced speculative investment in the sector.
This is really just a delayed adjustment along the lines of an established national change, Shenzhen possibly encountered the slowdown later owing to increased expectations/hype/financing availability and special economic and political darling status.
I would say from physical observation that the second half of last year was the real slow down, things haven't changed much since then.
The local real estate market is pretty expensive... a lot of people who bought apartments 10 years ago are now USD multi-millionaires, despite having real incomes as low as 1-2000USD/month. As a consequence of consistent price growth, purchasing a small apartment now costs about the same as Sydney, with a median price above USD$1M. It is fairly difficult to rent a halfway decent apartment under about 6000CNY (~1000USD)/month, many pay double that or more.